No matter the location, margins continue to tighten across the restaurant and bar industry. As food costs and rents rise in tandem, especially in larger cities, it’s crucial that restaurateurs and their general managers find active solutions for these concerns without passing every price increase onto the customers. According to Tabulate’s data, industry food costs are between 25% and 27%, on average.
With regards to rising rents, paying a set mortgage each month might be better than paying rent that could fluctuate each year, but not everyone has the capital or investors to purchase property outright. Thus, it falls to managing food costs to help keep margins from shrinking further.
Beyond helping margins, establishing and following consistent inventory practices will improve the overall quality of your business for both your numbers and your customers. Here’s three tips for improving the inventory process.
1. Use contemporary digital tools
“Work smarter, not harder” might be a cliche, but there’s a reason it’s a popular saying. In 2018, there’s no reason restaurant operators should be manually counting everything by hand. Between modern POS systems for the front-of-house to track sales accurately and back-of-house platforms that scan product barcodes with ease, the practice of taking inventory has never been simpler or more efficient. With the Tabulate bookkeeping system, restaurant owners can keep track of exactly how much inventory is sitting on the shelves each week.
2. Conduct a consistent inventory
Even with modern technology, keeping inventory still requires a time investment. To ensure the accuracy needed to track food costs and waste effectively, restaurants should track inventory on a regular basis. Inventory should be measured on a monthly basis, at minimum. Taking inventory on a weekly basis will improve your numbers even more, though, and can give more insight on how a restaurant is performing from week to week. It’s important to conduct inventory on the same day each week, or on the same day every month to keep numbers accurate.
3. Make “first in, first out” a way of life
Completing steps one and two are only part of the battle. Restaurant owners or managers could know exactly what they have and when, but if the kitchen isn’t using its resources appropriately, food waste can quickly accumulate—which is money that could be saved.
With the “first in, first out” (FIFO) method, arrange all perishable goods by their expiration dates with the products expiring later in the back. Then, train kitchen staff and servers to use everything in the correct order. Not only will this help reduce food waste, but it will also help with the ordering process, as it will be easier to see what’s running low and what can wait to be re-ordered.
Keeping an accurate inventory remains one of the most useful tools in the arsenal of any enterprising restaurateur wanting to control costs as effectively as possible. To ensure success for a restaurant or bar, operators should invest in good tools, create good internal systems and train staff well.
This post is sponsored by Tabulate